The HHS’ decision to curb the implementation of certain new mini-med plans has changed this marketplace slightly since the writing of this article. Look for coverage in upcoming weeks about how this move may affect your practice, and the limited benefit industry as a whole.
You’ve heard the saying: “The more things change, the more they stay the same.” This is certainly where things stand right now with the limited medical marketplace. The much ballyhooed date of Sept. 23 came and went with nary a change on the limited medical plan landscape.
If you’ll remember, Sept. 23 was the six month anniversary of the passage of PPACA. It was on this date that grandfathered plans would be required to meet certain provisions of PPACA in order to maintain grandfathered status as a health plan. Earlier this year, it appeared that grandfathering rules would strongly affect the limited medical (also known as mini-medical or mini-med) marketplace by requiring certain plans, among other things, to cover dependants to age 26, remove pre-existing condition limitations, and remove annual and lifetime limits.
The removal of annual limits (or meeting at least $750,000 in 2011) threatened to end the existence of any limited medical plan that was filed as a group health plan and included co-insurance features. Supposedly, this would have meant that beginning on Oct. 1, 2010, any plan renewing with these features would need to be replaced, therefore affecting a majority of the lives covered on limited medical plans today.
Mini-med plans saved?
After a feverish lobbying effort by the carriers most affected by PPACA, the Department of Health and Human Services (HHS) saw fit to offer a waiver process by which carriers, plan administrators, or employers could request exclusion from the annual limit rule. Early feedback indicates that the HHS has granted most, if not all, of the waivers. The minimum loss ratios are also a contentious point for limited medical plans, and early signs indicate that the government might waive that restriction, as well.
As it turns out, the HHS interpretation of how PPACA would affect certain plans was a boon for all of those limited medical plans that stood to lose so much. While new business can only be written on the fixed indemnity style of limited medical plans, there was suddenly no need for employers to madly rush to switch the affected plan designs, because the government decided not to enforce the act.
So, what appeared to be an oncoming tsunami of change turned out to be just a high tide. The government blinked. Maybe, if we wait long enough, the government will fully acknowledge that limited medical plans serve a very useful purpose in the overall health insurance marketplace and provide a place for them under reform.
The future of your mini-med business
What does this mean for brokers with limited medical business? First, if you’re looking to write a new piece of business, you still can – but make sure you use a fixed indemnity group supplemental program, which will not be affected by the PPACA legislation. Second, if you have a piece of business in place that PPACA affects and that is not eligible for the waiver, contact a fixed indemnity plan to help you move that business. Make sure the new plan can meet all of your client’s administrative needs. Finally, if your client received the waiver, take a deep breath and analyze your options. And make sure you have a back-up plan in case the government throws a curve you weren’t expecting.